Company Overview - Guotou Securities has issued a "Buy-A" investment rating for Weilong Delicious (09985) with a 6-month target price of HKD 14.27 [1] - The classic spicy strips continue to provide stable cash flow, while vegetable products like konjac and seaweed snacks are capturing the health-conscious demand, with projected revenue of CNY 3.37 billion in 2024, accounting for 54% of total revenue, marking the first time these products become the largest category [1] Industry Trends - The spicy strip industry is experiencing expansion, with flavor differentiation reshaping the competitive landscape, where Weilong's sweet and spicy flavor leads the market [2] - The industry has seen a compound annual growth rate (CAGR) of over 20% from 2014 to 2023, indicating a robust growth trajectory [3] Competitive Advantages - Weilong has established itself as a high-trust brand through automated and transparent factories, enhancing production efficiency [2] - The company employs a differentiated strategy with five major flavor categories: sweet, spicy, fragrant, durian spicy, and regional spicy, continuously innovating its product matrix [2] - Weilong has effectively turned spicy strips into a social currency among younger consumers, increasing user engagement [2] Distribution and Supply Chain - The company maintains a solid foundation in traditional channels such as supermarkets and convenience stores while rapidly expanding into bulk snacks and live e-commerce, with 94 live broadcasts on Douyin in 90 days, leading to a continuous increase in online sales proportion [1][2] - The number of cooperative distributors is expected to increase to 1,879 in 2024, a year-on-year growth of approximately 10% [2] - Weilong's supply chain includes five direct-operated factories in Henan, incorporating 5G production lines to reduce costs and ensure food safety [1] Future Outlook - The konjac food segment is still in its early growth phase, with significant market potential, and the versatility of konjac allows for extensive flavor innovation [3] - To maintain its leading position, Weilong needs to enhance flavor research and development, leverage its brand influence to promote new flavors, and expand its distribution network and SKU offerings [3]
国投证券：予卫龙美味“买入-A”评级 目标价14.27港元